If a good tenant breaks lease would you give back the deposit?

Investor from Mcallen, Texas

posted about 2 years ago

Hello everybody,

Like the title states, they were good tenants that gave me more than a 30 day written notice. I was able to rent out their old unit without have a vacancy period. Now, would you guys return their deposit even though they broke lease? Why or why not?

Residential Real Estate Broker from Greenville, North Carolina

replied about 2 years ago

If the relationship were still good and the property didn't require any work prior to new tenant taking possession, then I probably would. However, to set the ground rules for how you run your business you may want to consider keeping it since they did in fact breach their contract with you.

from Urbana, IL

replied about 2 years ago

I'd let them know how much I appreciate how they were good tenants but policy states 'x,y,z.' I'm on their side and will talk to the owners to see if they might bend rules a bit but understand that they are breaking the lease.

If they left the unit in great shape with no repairs or cleaning and they were within a few months of their lease ending then I'd give it back. If they left me to take care of repairs and cleaning I'd think otherwise.

Are you talking deposit or LMR. The sole purpose of a deposit is to cover tenant damage. If there was no damage then they are entitled to their deposit back. If you are referring to LMR that discussion needed to me covered with tenant when they informed you they were leaving. In light of the fact that you had a new tenant and did not lose any rental income then it would be illegal to hold their LMR as that would amount to being paid double for the same month.

It depends on what you are referring to but based on your comments I would say legally you can not hold either in this case. It also may depend on what is written in your lease. As for them being good tenants that is irrelevant, they are not good tenants they are ex-tenants. Treat every tenant/ex-tenant the same.

Hard Money Lender, Broker Associate, Investor from Naples, Florida

replied about 2 years ago

I have allowed several tenants to break their lease. Some got new jobs and needed to relocate, etc. They worked with me allowing me to show the property. I didn't lose a dime in rent and was actually able to get more out of the new tenants due to our marked. I gave them every dime back except in one case where they left it filthy. They knew I was going to deduct for cleaning and were OK with that. They paid the rent around the 5th for that money and left about the 8th. It was clean and ready for the new tenants. We ended our business on good terms.

from Bozeman, Montana

replied about 2 years ago

I always charged a security deposit that was equal to one months rent. When we would sit down to sign the lease (11 pages I believe) I would explain to them that the security deposit was not to be used as last months rent, if for whatever they need to move out before the end of there lease they would be responsible to the end of there lease term, however, we would (on their behalf) actively market and try to get the unit re-rented ASAP. Due to the costs associated renting a place (advertising, time, driving....) we would charge a "Lease-Up Fee" which was $250. This fee was taken out of there security deposit. Tenants were still responsible for leaving the premises like it was when they moved in (less any "normal" wear and tear) i.e. replacing light bulbs, having carpets professionally steam cleaned, dusting... anything that was detailed in the move-in inspection report (usually several pages, depending on the size of the home.) We would coordinate with a vendor to have any items that were the tenants responsibility (assuming the tenant didn't take care of it) fixed or replaced, we would charge a $25 coordination fee with each vendor that we needed to coordinate with.

Once everything was ship shape and the unit had been re-rented we would return what was left of the security deposit providing the previous tenant with a detailed accounting (with attached receipts) of all the charges that had been made against their deposit and usually a check for the remainder amount.

Property Manager from Ketchum, Idaho

replied about 2 years ago

I agree with Deanna on one condition. Does the lease state that there if the lease is broken or the signer moves out before the end of the contract that a fee or forfeit of deposit will result? If so, I would abide by the terms set you in your document. That is why they call property management a business. When they broke the lease they must have known that they would forfeit the deposit unless you told them otherwise. So I suggest you stick to the letter of what you set up. You were lucky to get a new tenant, but you still had to go through the turn, pay the costs of that turn and it took your time to do so. Time should be turned into profit for you.

I recently had a tenant sign a short term lease (3 months) and then decide not to move in. They had paid their security deposit and first month's rent as well as the pet fee. I started over to try to get a new tenant asap so that they would not be responsible for the whole lease. I was able to find someone to move in after one month. But I spent lots of time and effort finding a new tenant. I retained their first month's rent, the security deposit and returned their pet deposit. They understood and everyone was happy with the result. Good luck to you.

from Alpharetta, Georgia

from Minneapolis, Minnesota

replied about 2 years ago

I should have asked you to clarifiy.

Unless there was an actual Lease Break Fee charged / or written agreement / or listed in your lease agreement as such, you would not be able to retain any of the security deposit, unless there were damages to the unit.

You are not permitted to collect "DOUBLE" rent for the same period of time. only lost days not rented.

Real Estate Agent/Property Management from Houston, Texas

replied about 2 years ago

@Baltazar Haro Not giving legal advice. In Texas breaking a lease is not a reason to keep the deposit. The landlord is obliged to mitigate the damages of a broken lease. Since you found a new tenant without a lapse in revenue, there are no damages.

You can deduct expenses you incur to re-rent the apartment, like advertising costs, if any.

from Los Angeles, California

replied about 2 years ago

In California, if someone leaves before the end of the lease, the owner must make an effort to get the place rented. Until it is occupied, the renter is technically responsible for the rent. In your case, it sounds like you were able to get it rented quickly. You would be entitled to deduct any cleaning/repair costs as well as advertising and your time for interviewing prospective tenants. The rest of the security deposit should be returned. Check your local laws on what a security deposit may be used for, and how an early departure can be handled.

Investor from Baltimore, Maryland

However Like @Fred Heller says, you must check your local laws. You may not be able to legally keep the deposit.

Generally when a tenant breaks a lease you are entitled to the amount due until the end of the lease. However you must make attempts to limit your damages by making efforts to release the property. Since you immediately released the prperty you have no damages. Most states have tough rules regarding security deposits and often there are triple damages for mishandling the deposit.

Investor from Wasilla, Alaska

replied about 2 years ago

I think the last couple posts have the answer for you. What I've always done is do my best to release the unit. The tenant leaving knows that they are responsible for the rest of the lease, and I know that I'm going to have a hard time going after them for it. I've always kept the deposit which covers not just physical damages, but also unpaid rents and fees. Fortunately, I've always been able to rent the place within a month, and my tenants usually don't do much damage, so I haven't been hurt by this.

Note: If you have a pet deposit, you might have a legal issue holding this back if the pet didn't cause any damage. This is one of the reasons I've started doing non-refundable pet deposits and/or monthly pet fees.